Head To Head

HEAD-TO-HEAD: Eastspring vs MFS Meridian

FSA compares two pan-European equity funds: the Eastspring Investments Pan European Fund and the MFS Meridian European Research Fund.

by Rupert Walker 11 January 201910 November 2020

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Mathieu Caquineau, Morningstar

Introduction

It was a difficult year for many Europe fund managers. The sudden downturn in markets during the final quarter meant that the MSCI Europe index ended 2018 in negative territory, down 14.32% for the year.

“The escalating US-Sino trade dispute and indications of a hawkish interest rate stance by the US Federal Reserve crystalized fund managers’ festering anxieties about the geopolitical and economic outlook,” said Mathieu Caquineau, associate director at Morningstar.

These broad concerns weighed more heavily than Brexit and other areas of political instability within Europe, although the failure of the UK to finalise its terms of exit from the Eurozone have aggravated the uncertainties fund managers have to navigate.

“Nevertheless, the resulting volatility also provides European funds with opportunities to invest in strong companies at low valuations,” argued Caquineau.

In this challenging environment, FSA asked Caquineau to compare and contrast two pan- European funds: the Eastspring Investments Pan European Fund. and the MFS Meridian European Research Fund.

	Eastspring	MFS Meridian
Size	$58.3m	$2.1bn
Inception	2001	2013
Manager	John Olsen	Gabrielle Gourgey
Three-year cumulative return*	16.34%	14.79%

Three-year annualised alpha*	2.19%	2.68%
Three-year annualised volatility*	12.39	12.19
Morningstar analyst rating	Silver	Silver
Morningstar star rating	*****	*****
FE Crown fund rating	****	****
OCF (retail share class)	1.70%	1.93%

Source: Morningstar, FE Analytics
*8 Jan 2016 – 9 Jan 2019

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